MUTUAL FUND BASICS
A mutual fund is simply an investment vehicle that allows many people to pool their money in a fund that allows professional money managers to pursue a specific "mutual" financial objective. When you invest in a mutual fund, you purchase shares of the fund. Each share represents partial ownership of the fund's portfolio of securities - and just like buying a stock, the number of shares you own depends on the amount you invest and on the price of each share.

You can track mutual fund share prices - also called the net asset value or NAV - in the financial listings in most major newspapers, or by setting up funds you are interested in following in a quote list in the secured client access area of this site.

A fund's NAV may fluctuate daily, rising or falling as a result of investment activity and market fluctuations. For funds actually held in your brokerage account, you will also receive regular statements and shareholders reports from the fund sponsor that will help keep you informaed about how your investments are performing.

Through your brokerage account with us, you have access to one of the largest selections of mutual funds in the business. When properly selected, mutual funds combine professional management, ease of purchase and redemption, simple record keeping, and risk reduction into a vehicle that is easy to buy or sell. You could go to each mutual fund company and open an account, but we offer the convenience of letting you hold many funds from different families in one account while getting an easy to understand central record of you holdings.

Categories of Mutual Funds

There are three basic types of funds available to you through your account.

Load Funds This is what the brokerage industry calls funds that have a stated sales charge. When an amount is stated as a load, it refers to either the maximum initial or deferred sales charge for that fund. Front-end loads (also called initial loads) this figure is expressed as a percentage of the initial investment and is incurred upon purchase of fund shares. Deferred sales charges (also called back-end loads or contingent deferred sales charges) are amounts charged based on the lesser of the initial or final value of the shares sold.

No-Load Funds This type of fund charges no sales or 12b-1 fees. There is a flat rate transaction fee charged for buying or selling funds in this category.

No Transaction Fee Funds Funds in this category have neither a sales charge (load) nor do we charge a transaction fee for these funds. Fees in this category typically have a 12b-1 fee assessed that covers the fund expenses.

Are mutual funds a "good fit" with your Investment Character?

As discussed in the section on features, mutual funds offer benefits such as diversification and professional management. Additionally, the long term investor (with at least a five to ten year horizon) has the opportunity to participate in income and/or capital growth through mutual funds which mirror their own investment objectives. Some of the more popular general objectives can be found in the section on mutual fund types.